Figure 21-5

-Refer to Figure 21-5.In graph (b) ,what is the price of good Y relative to good X (i.e. ,P_Y/P_X) ?

Question

Figure 21-5 -Refer to Figure 21-5.In graph (b),what is the price of good Y relative to good X (i.e. ,P_Y/P_X)? A) 1/3 B) 1 C) 3 D) 10

Quizplus · Accepted Answer

In graph (b), the slope of the budget constraint (BC) is equal to P_Y/P_X, which is equal to 3. Therefore, the price of good Y relative to good X is 3. The optimal choice is at point E, where the indifference curve (IC) is tangent to the BC. At point E, the consumer is consuming 6 units of good X and 2 units of good Y. This is the only optimal choice, as it provides the highest level of utility for the consumer given the prices and budget constraint.

Figure 21-5 -Refer to Figure 21-5.In Graph (B),what Is the Price of the Price